Many companies who don’t have integrated ERP Software use their website as a “shopping window” to display their products resulting in multiple issues.
Issues of Not Having Website Integrated with ERP Software
- Orders placed on the website and manually down-loaded to the server can be lost.
- Shipped Products that are not billed immediately can result in cash flow issues.
- Not having a handle on inventory status in the warehouse, the purchasing department often buys on ‘gut feelings’ which can result in a shortage or excess of inventory compounded by orders not being shipped on a timely basis.
- Customers who receive more products than ordered will return them and this can also result in excess inventory.
Benefits of Having a Website that is Integrated with ERP Software
- Customers can place their orders on the website, view previous buying patterns and view the actual inventory availability.
- The host server is updated in real time mode with customers’ orders placed on the website.
- The number of calls and faxes to the Customer Service Department are reduced allowing Customer Service personnel to provide better service.
- When the products are shipped, customers are invoiced at the same time.
- Customers can determine when their orders will arrive by viewing the courier’s information on the website.
- Inventory images displayed on the website serve as an online catalog.
- Sales Reps can review their customers’ information, place orders and revise them.
- Remote locations can view the inventory status in the warehouse, place new orders, and revise or delete them.
Case Study of Nationwide Company with Multiple Remote Locations
An Air-conditioner and Heating Supply Distributor gave each of its remote branches a computer. At night the branches uploaded their data to the main host computer. If the transmission failed, the IT department had to manually upload the data in the morning resulting in the following issues:
- The previous day’s sales and inventory status were not available to the end user until the host server was updated with all the nightly transmitted data.
- The Purchasing Department had difficulty keeping track of accurate inventory at the remote locations resulting in a shortage or excess inventory at the branches.
- Inventory shipments to the remote branches resulted in additional freight cost.
- If one location was short of inventory and another had excess inventory the Purchasing Department had to replenish the location that was short of inventory.
- Excess inventory at a branch could not to be transferred to the branch that was short of inventory.
Benefits Achieved by Connecting all Branches to the Host Server
The management realized that the above issues created business disruptions and affected the company’s bottom line profit. In order to resolve these issues, they decided to eliminate the servers at the remote locations and replaced them with fast internet lines connecting all the branches to the host server. It eliminated the data upload and down load and the branches’ information was available to all the end users.
The following results were achieved:
- The host computer viewed each branch as a remote warehouse.
- The Purchasing Department had a full view of inventory status in each branch.
- If one warehouse had excess inventory and another was short, the excess inventory was transferred or the orders were shipped via one of the carriers the distributor used.
- The customers who were able to access the integrated Website viewed the inventory status and could place their orders day or night.
- Two-night shifts were added in the branches’ warehouses resulting in the orders being packed and ready for the contractors who came to pick up their orders on the way to job locations early in the morning.
- Customer satisfaction was increased.
New Issues the Management Team Had to Face
- Analyzing the customer buying patterns the Management Team learned that customers were buying certain items from their competitors who provided lower prices.
- In order to resolve this issue, the Management Team lowered their prices for certain items to match their competitors’ prices.
- The contactors, not having to stop at multiple locations to pick up their orders, bought additional items they didn’t buy before from the Distributor resulting in increased sales.
In today’s market environment where the competition is stiff, having modern
ERP Software enabled the Management Team to make quick decisions about how to change their business model. It resulted in better customer satisfaction, increased sales, and improved bottom line profit.
About SMC & Dani Kaplan:
Since 1980, Dani Kaplan has worked with manufacturers, distributors food distributors and food processors as the trusted advisor helping them lower their operating costs, stream line their operation and control the inventory.
Dani can be reached via SMC – http://www.smcdata.com/contact